You may be concerned about being duped by a bogus Bitcoin exchange because there is little government control and no single institution in charge of cryptocurrency trading. Since there have been fake exchange scams, this is a legitimate concern. There are ways to avoid scams and keep your money safe, however.
Guaranteed Rates of Return
A risky investment, cryptocurrency is. Even if a particular investment seems straightforward or gives higher returns than others, you might still lose money. A guarantee of a profit is a strong indicator of fraud. Using new deposits to cover withdrawals was a method employed by this company.
If a crypto exchange offers a 100% guarantee despite a bright outlook, be wary. Any deal that seems too incredible is most likely a scam. As you would when making purchases online, proceed with caution when dealing with a digital currency. Stay immune to all plots to fool you because a deal might seem too good to pass over; it would help if you always double-checked everything.
Impostors
It is not uncommon for fraudulent crypto exchange to pretend to be affiliates of well-known financial institutions. They often pose to partner with legitimate trading platforms to collect customer deposits and prevent customers from withdrawing their funds.
Also, keep in mind that if an exchange links to an existing platform, then the original platform should also connect to the trading exchange. Before you click on the link, double-check its validity.
Fake Cryptocurrencies
A scammer could easily offer a fake new coin because there are so many different cryptocurrencies. And they are fond of saying if you did not get in on Bitcoin early enough, you could still make profits from their new gold-backed virtual currency is soon launched.
You should seek out third-party resources verifying the existence and volume of the coin before investing in it. Due to the lack of a standardized listing process like there is with stocks. Look for mentions in the news, monitor trading data, and examine the firm behind the offering instead.
Fake apps
Creating a bogus mobile app may also be used as a fraud method. The app may attempt to portray itself as an accurate cryptocurrency exchange. One thing the scammers take advantage of is that the app stores cannot detect all scams. So, when you download one from an app store, you may presume that the app shop has approved it and, therefore, that the app is safe to use. As long as the scammer appears genuine, reviewers may have no idea that the company is a fraud.
Unsolicited Communications
Cold calling is not an uncommon strategy for financial advisors, but it is a cause for concern. No one can tell if the caller is a real person because you have no way of verifying their identity. The product may or may not be beneficial to you, even if it is legitimate. Emails, letters, phone calls, and text messages are examples of unsolicited communications that scammers may send to you.
Offers of Free Coins
Scammers have used offers of free coins as a ploy to seduce unsuspecting investors. And the recent improvement in technology and social media platforms play a significant role in running these scams. Customers were encouraged to deposit money by scammers who offered free coins and collected personal information by claiming it was a “Know Your Customer” requirement. When the unwary victims try to withdraw their money, they realize they have already gotten duped.
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